The requirement, in our words
A Market Participant must not quote, bid for or trade a financial product as Principal either intending to create, or in a way that does or could create, an impression that misleads about active trading in a product or about its market or price. It must also not quote, bid or trade for another person where it intends to create that impression, knows the person means to create it, or ought reasonably to suspect, taking into account the Rule 5.7.2 matters, that the person placed the Order with that intention or that the Order will have that effect.
What the rule is trying to do
The rule covers both principal conduct and facilitation of a client. The third limb is objective: a firm that ought reasonably to suspect the intent is caught even without proof of actual knowledge. The 5.7.2 factors are the structured way to test that suspicion.
What good practice looks like
Train order reviewers on the restructured rule and the 5.7.2 factors. Build surveillance scenarios that test intention, awareness and the ought-reasonably-suspect limb. Record the reviewer analysis against each factor. Escalate a suspicious order series before execution where possible. Keep the client communications and the decision.
What changed in the instrument
Item 93 replaces Rule 5.7.1. The rule is restructured into a principal limb and an on-account-of-another limb with intention, awareness and objective suspicion. Items 94 to 103 amend Rule 5.7.2, add a residual factor (l) and align the cross-references.
Evidence an auditor or ASIC asks for
| Category | Record to keep | Retention |
|---|---|---|
| Surveillance | The post-trade and pre-trade scenarios that test each limb of 5.7.1, including the objective suspicion limb. | Seven years. |
| Review record | For each alert, the 5.7.2 factors considered, the reviewer, the conclusion and the action. | Seven years. |
| Training | The training record for order reviewers and representatives on the restructured rule and the factors. | Current, plus attendance. |
| Escalation | The escalation and, where required, suspicious activity reporting record. | Seven years. |
Common gaps
- Surveillance tests only intentional spoofing and ignores the ought-reasonably-suspect limb.
- The 5.7.2 factors are not recorded, so the review cannot show why suspicion was or was not held.
- The client is not asked about intent when the pattern is ambiguous.
- The rule is treated as a trading desk issue and not as a participant supervision duty.
What to do before 17 March 2028
- Rewrite the surveillance scenarios to the three limbs.
- Make the 5.7.2 factor analysis a required field in the alert record.
- Train reviewers and representatives.
- Test the escalation path with a suspicious series.
Dates and cross-references
Commences: 17 March 2028 (Rule 2 of F2026L01223 and the registration date). Retention: Seven years for the surveillance and review records.
Read with: 5.6.3A, 5.7.2, 5.7.3 (repealed).
Source
This page reads ASIC Market Integrity Rules (Securities Markets) Amendment Instrument 2026/574 (F2026L01223), Schedule 1, items 93 to 104, against the current compilation Compilation No. 6 (F2024C01108). Retrieved 2026-10-19. The requirement above is our own statement, not the instrument's wording. Not legal advice; does not certify.